You have been assigned the task of completing the proposed budget for the next fiscal year for your department. The fiscal year is from January – December. As a tool, you have the budget from the previous year, a salary worksheet, and the monthly expenses report. You will be using the historical data provided as well for considering your projections for future costs.
First, download the HIM Department Worksheet
Next complete the following.
- Analyze the 2015 Budgeted Amounts for the various areas within the department budget.
- Analyze the 2015 Actual Budget Spent for the various areas within the department budget
- Calculate the variance between what was budgeted and was spent in 2015. Enter the variance amount in the appropriate column.
To create your 2016 budget, follow the guidelines from your CFO:
- You have been told to project a 5% salary increase for all employees.
- You have been told to project an increase in office supplies of 7%.
- You have been told to project a 5% increase in all other areas.
Expert Solution Preview
Introduction: In analyzing the proposed budget for the next fiscal year in the medical department, it is essential to understand the historical data provided to consider and project future costs accurately. The task at hand involves analyzing the 2015 budgeted amounts, 2015 actual budget spent, calculating variances, and following the guidelines given by the CFO to create the 2016 budget.
1. Analyzing the 2015 Budgeted Amounts:
To analyze the 2015 budgeted amounts for various areas within the medical department budget, we need to refer to the budget worksheet provided. The budgeted amounts for each area, including salaries, benefits, supplies, equipment, travel, and other expenses, can be found in the budgeted column of the worksheet. We can use this information to compare with the actual amounts spent and calculate variances.
2. Analyzing the 2015 Actual Budget Spent:
To analyze the 2015 actual budget spent for various areas within the medical department, we need to refer to the monthly expenses report provided. The actual amounts spent for each area, including salaries, benefits, supplies, equipment, travel, and other expenses, can be found in the actual column of the worksheet. We can use this information to compare with the budgeted amounts and calculate variances.
3. Calculating the variance between what was budgeted and what was spent in 2015:
To calculate the variance between what was budgeted and what was spent in 2015, we can subtract the actual amount spent from the budgeted amount for each area of the department and record the variance in the appropriate column of the budget worksheet. This will help us identify areas where we over or under budgeted and adjust accordingly while creating the 2016 budget.
Following the guidelines provided by the CFO, we can project a 5% salary increase for all employees, an increase in office supplies of 7%, and a 5% increase in all other areas while creating the 2016 budget. It is advisable to use historical data, including past budgets and expenses reports, to arrive at accurate projections for future costs and create a realistic budget plan for the medical department.
